I am using QB Online Advanced Payroll, and have been using QB payroll for many years. After creating a pay run for the month of April 2021, QB for some reason starting applying thresholds to our employer pension contributions. Previously, employer pension contributions were calculated as a percentage of the gross pay per month, and thresholds were not used to adjust the gross amount at all. In the April pay run, QB applied thresholds (i.e. deducted £520 from the gross pay and then applied the employer pension contribution percentage to the resulting amount). That is not what we want and I don't know why it started doing this. I have also been unable after many hours of searching to find any way to turn this feature off. Any help greatly appreciated! Thanks
Hi there, mgclark9.
I'm here to help you ensure that your pension contributions set up properly.
Let's check your pension setting to make sure that all pensionable items were included. I'll show you how.
1. Go to the Employees menu.
2. Click the Payroll Setting tab.
3. Under Business Setting, choose Pension Settings.
4. Go to the Contribution Plans section and hit the Name pension link.
5. In the Applicable pay categories, exclude Pension and add Salary.
6. Click Save.
Then, recalculate the payroll of the employee to ensure the calculation is correct after making any changes.
1. Go to the Employees menu.
2. Click the Pay Runs tab.
3. Choose a pay period and click the date link.
4. From the Actions tab, select the employee.
5. Click Recalculate from the Actions menu.
Review this guide for more information: QuickBooks Online Advanced Payroll hub.
Reply to this post if you have further questions about pension contributions. We're always here to back you up.
Hi Giovann_G, thanks for getting back to me so quickly I really appreciate that! Unfortunately, the menus, tabs , settings, etc. that you referenced don't show up as you describe in my version of QB Payroll, so I couldn't follow them exactly :( I use QB Online and QB Payroll together, so when I select Payroll from the main QB menu it then lets me select Employees. From there, there is no Business Setting, but there is a tab for Payroll Settings which then has a Pension Settings link. From there I can see my Contribution Plans, but no Name pension link (though i can see my pension plan listed). From there, I can't find anything that looks like Applicable pay categories so can't see anywhere to exclude Pension and add Salary.
I double checked with the QuickBooks Online Advanced Payroll hub, and my interface matches what they show there, so not sure what to do now. What's strange to me is that I've been using QB Payroll for years with same pension plan, same employees and never had this problem before this month.
Any other ideas?
Thanks for gettings back to us mgclark9, please click Payroll from the left-menu > Payroll Settings > Pension Settings > Scroll to Contribution plans > Click into the relevant contribution plan > See if the option for 'Calculate pension on qualifying earnings' is selected. 🧐
I can see that an option for 'Calculate pension on qualifying earnings' is displayed if the scheme is an auto enrolment one, but we have always said No to the Auto enrolment question, so have not seen that that question has been available to answer. Instead, options for LEL and UET offset are displayed and we have always left them blank (0) so they are not applied.
Since you're still unable to disable the pension threshold after following the suggestions shared by my colleague above, I'd recommend contacting our Customer Care Support.
With their tools, one of our specialists can pull up your account on file and share how you can turn off the pension threshold accordingly. To do so:
Also, here's a reference you can read for a compilation of articles you can use while working with us: QuickBooks Online Advanced Payroll.
If there's anything else that I can help you with, please let me know in the comments below. I'll be here to lend a hand. Stay safe!
Hello Community Users, We just wanted to add on to this thread with some tips to resolve this issue with pension thresholds that resolved the issue for the customer who posted here originally.
Try excluding and re-including employee.
Re-save all contribution plans to apply the correct threshold.
Run test pay run and calculations and see if they are correct on next pay run.
Then re-save pension settings and it should allow you to not account for thresholds correctly.
You have the options to make adjustments on next month's pay run for already submitted incorrect figures
Any questions at all or if your situation differs please feel free to reply here, we'd be happy to help you.
Threshold figures should never be deducted when calculating Pensionable Earnings. that's simply not what they are for. The Threshold figure is just the minimum salary at which an employee has to be auto-enrolled into a pension scheme.
I recently discovered that this has been happening and it's a huge headache as about ten months-worth of pension contributions have been wrongly calculated. Pensionable Earnings (in our situation) should be gross salary minus PAYE, not minus threshold.
As it stands, QBO is causing users to breach UK pension regulations by under-contributing both employer and employee contributions. I've raised an official complaint about this but if you're using QBO for payroll, please do check this as you may have a problem on your hands; if you're not using QBO for payroll, don't start until this has been fixed.